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US Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
October 4, 1996
SOLAR-MATES, INC.
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(Exact Name registrant as specified in its charter)
New York 0-26022 11-2396918
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8125 25th Court East
Sarasota, Florida 34243
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(Address of principal executive offices)
(941) 359-3599
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On September 26, 1996 Solar-Mates, Inc.(the "Company") entered into a
subscription agreement with an Austrian based bank for the infusion of $22.5
million in equity financing of which $7.5 million was funded on October 4, 1996.
The purpose of the funding is to pursue a specific acquisition targeted by the
Company in the sunglass industry.
The equity infusion is in the form of non-voting convertible preferred shares of
the Company. The conversion price for the preferred shares in the initial
infusion is the lower of 80% of the market price of the Company's publicly trade
Common Stock, $.001 par value ("Common Stock") or $5.50 per share, and the
shares bear dividends at an annual rate of 6.5%. The remaining subscriptions
for an additional aggregate amount of $15 million of non-voting convertible
preferred shares is to be consummated simultaneously with the closing of the
targeted acquisition. The conversion price for the preferred shares to be
issued in the subsequent $15 million infusion is the lower of 80% of market
price for the Common Stock or, with respect to $7.5 million of such amount,
$6.75 per share, and with respect to the other $7.5 million, $8.25 per share.
Such shares are to bear dividends at an annual rate of 6%. The Company may, at
its sole discretion, pay any and all dividends in preferred shares of the same
series rather than in cash.
The convertibility of any preferred shares into Common Stock is subject to
shareholder approval. The agreement provides that the purchaser of the shares
shall vote all of the underlying shares (if and when converted), in connection
with any vote of the shareholders of the Company relating to the election of
directors, for a majority of directors, in accordance with the directions of
Stephen Nevitt, the Company's President and Principal Executive Officer, or his
successor or designee.
The subscription is being effected pursuant to an off-shore exemption in
reliance upon Regulation S under the Securities Act of 1933.
At the closing of the initial $7.5 million infusion, the Company also issued to
the investor three year warrants to purchase 150,000 shares of Common Stock at a
price of $5.5625 per share exercisable commencing on January 1, 1999. In
connection with the closing of the second infusion of $15 million, the Company
is required to issue an additional 600,000 identical warrants, with an exercise
price of $7.50 per share for 300,000 of the warrants and $10 per share for the
remaining warrants. The Company also paid a commission to a third party equal
to 7% of the investment and immediately exercisable five year warrants to
purchase 200,000 shares of Common Stock at a puce of $5.50 per share.
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ITEM 7. EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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99.1 Press Release dated October 7, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Solar-Mates, Inc.
(Registrant)
Dated: October 7, 1996 By Stephen Nevitt: /s/ Stephen Nevitt
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President
(Principal Executive Officer)
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FOR IMMEDIATE RELEASE CONTACT: JACK WYNN
MONDAY, OCTOBER 7, 1996 (540) 687-3587
SOLAR-MATES RECEIVES EQUITY FUNDING TO PURSUE ACQUISITIONS
Sarasota, Florida - Solar-Mates, Inc. today announced the closing on Friday,
October 4, 1996 of a $7.5 million equity investment as part of an overall $22.5
million equity subscription from an Austrian-based bank, with the purpose of
pursuing a specific acquisition targeted by the Company in the sunglass
industry.
The equity infusion is in the form of non-voting convertible preferred shares of
Solar-Mates. The conversion price for this initial infusion is the lower of 80%
of the market price of Solar-Mates' stock of $5.50 per share, and the shares
bear dividends at an annual rate of 6.5%. The remaining subscriptions for an
additional aggregate amount of $15 million of non-voting convertible preferred
shares is to be consummated simultaneously with the closing of the targeted
acquisition. The conversion price for the preferred shares to be issued in the
subsequent $15 million infusion is the lower of 80% of market price or, with
respect to $7.5 million of such amount, $6.75 per share, and with respect to the
other $7.5 million, 8.25 per share. Such shares are to bear dividends at
an annual rate of 6%. The convertibility of any preferred shares into Solar-
Mates Common Stock is subject to shareholder approval. The subscription is
being effected pursuant to an off-shore exempt offering in reliance upon
Regulation S under the Securities Act of 1933.
At the closing, the Company also issued to the investor three-year warrants to
purchase 150,000 shares of Common Stock at a price of $5.5625 per share
commencing on January 1, 1999. In connection with the closing of the second
infusion of $15 million, the Company is to issue an additional 600,000 identical
warrants, with an exercise price of $7.50 per share for 300,000 of the warrants
and $10 per share for the remaining warrants. The Company also paid a
commission to a third party equal to 7% of the investment and immediately
exercisable five-year warrants to purchase 200,000 shares of Common Stock at a
price of $5.50 per share.
According to Stephen Nevitt, President and CEO of Solar-Mates, Inc., "This
infusion of equity is a key part of our acquisition strategy, which will include
new distribution channels to market our products. This acquisition process
should benefit both the shareholders and the Company through higher market
concentration and financial strength."
Solar-Mates, Inc. markets the new H2Optix-Registered Trademark- line of water
sports oriented eyewear, as well as a diversified line of quality sunglasses at
popular prices. Solar-Mates, Inc. manufactures all of its sunglasses through
outside sources.
Solar-Mates maintains its principal executive offices at 8125 25th Court East,
Sarasota, Florida, (941) 359-3599.
